The Chair of the Australian Accounting Standards Board (AASB) introduced research that was triggered by claims that "accounting standards have become so 'outrageously complex' that it is difficult for investors to understand financial statements". The research objective was to investigate the factors that impact the ability of the users of IFRS Accounting Standards to comprehend their meaning and requirements. The researchers originally concentrated on the Australian environment and in a second study expanded the research globally.

As one factor affecting understandability, the research looked at the readability of standards, the length of sentences, the average number of syllables per word. Findings included that older standards (eg. IAS 39) scored much better on readability than newer standards and that standards with topics that contain long words (eg. IFRS 14) score low on readability. When looking at how the topic of a standard affects the understandability, new standards such as IFRS 9 were considered the most difficult to understand while older standards that deal with less complex transactions scored much higher on understandability.

Overall, the research yielded the following findings:

1. Understandability and application. Lack of understandability impacts the application of a standards, for example the identification of the scope or the application of certain paragraphs. Recommendations included to make the rationale for a certain requirement readily available, maybe in the standard itself.
2. Language. Inconsistent use of language impairs understandability as do complex sentences. Not all users are native speakers. It was suggested to make more translated content available and to include questions on readability and understandability in exposure drafts. 
3. Examples. Examples were considered helpful, to a degree, but flowcharts were considered to be more helpful. It was, therefore, suggested to make more use of flowcharts where the topic described lends itself to that.
4. Access, engagement, education. Less-resourced users have limited access to standards and supporting material, limited resources and language barriers mean less engagement, and limited access to supporting material also hampers adequate education. Suggestions included more open access to primary material and supporting/education material in more languages.

The research also noted that the fact that standards are (perceived to be) difficult to understand leads to users (for example preparers) to rely on experts which in turn leads to even less general understanding of the accounting literature.

The IFASS members then shared observations and ideas on the topic:

• Increased complexity of the standards is also owed to the fact that transactions are becoming increasingly complex. It is not always possible to describe a complex transaction in simple language.
• Examples must strike the right balance between being too simple and too detailed, it must be avoided that they are understood as the requirement itself. 
• The perceived complexity of standards leads to users preferring secondary literature to the standards themselves, which was considered dangerous.
• Even users with no complex transactions have to read and assess the entire standard to determine which parts of it apply to them.
• Making translated content available is considered helpful, however the quality of translations is paramount.
• Standard setters could work with CPA institutes to help them develop better education programmes that lead to a greater understanding of the standards.

Note: The first research article looking at the Australian environment only is freely available here in the Wiley Online Library. The second research article has not been published yet.